U.S. Congress votes for corruption by overturning historic transparency law in gift to big oil

Today’s
decision by the Republican-led U.S. Senate to overturn a rule designed to stop
oil companies striking corrupt deals with foreign governments is a grave threat
to U.S. national security and an astonishing gift to big oil, said Global
Witness. The news comes just two days after Rex Tillerson, a longstanding
opponent of the law while CEO of ExxonMobil, was confirmed as Secretary of
State, and the day after the U.S. eased sanctions on Russia.

The oil industry
is the most corrupt on the planet. Alongside a broader
anti-regulatory push and President Trump’s failure to address his conflicts of
interest, this vote to roll back efforts to bring oil deals into the open is
another sign of the rapid erosion of U.S. democracy in favor of big business.

The
law, known as the Cardin-Lugar transparency provision, requires U.S.-listed
extractive companies like Exxon, Chevron and several Chinese oil majors to
publish details of the hundreds of billions of dollars they pay to governments
across the world in return for rights to natural resources. Bringing shady oil
deals to light should help ensure these vast public revenues benefit all
instead of lining the pockets of corrupt elites. However, this week, Congress
voted to rescind the implementing regulation by the U.S. Securities and
Exchange Commission, with the House of Representatives voting on Wednesday and
the Senate voting earlier today.

“As
Exxon CEO, Rex Tillerson did everything in his power to gut this law, because
it doesn’t suit big oil’s corrupt business model. Now he’s Secretary of State
Congress has immediately sanctioned corruption by green lighting secret deals
between oil companies and despots. These deals deprive some of the world’s
poorest people of oil wealth that is rightfully theirs. Given the President’s
massive conflicts of interest and his administration’s broad attacks on
regulation, it appears our institutions are increasingly being abused to
further the business interests of a powerful few. This is how corrupt dictatorships
start,” said Corinna Gilfillan, Head of U.S. Office of Global Witness.

This
move sets the U.S. in opposition to a broader global trend toward greater
transparency and accountability in how oil, gas and mining revenues are
managed. Thirty other major economies around the world, including the UK,
Canada, Norway and all 27 members of the European Union – have laws requiring
their oil, gas and mining companies to disclose their payments to governments.
Dozens of major European and Russian oil companies have already published their
payments to governments. Claims made by the oil lobby that greater transparency
will harm U.S. oil companies’ competitiveness has proven untrue.

Global Witness notes with concern the
complete fabrication of facts by the Republican leadership in their
presentations about the Cardin-Lugar transparency provision. They have
relied on the American Petroleum Institute’s “facts,” which have been
discredited over the past six years in multiple fora, while being totally
unwilling to hear an alternative view. This is evidenced by their absence
during the actual debate, not to mention the fact that many in the leadership
who have pushed this resolution receive vast sums from the oil and gas
industry. In the absence of a better explanation, it is difficult not to
conclude that big oil has just had its lackeys liberate them to be corrupt.

“The
U.S. has thrown away its global leadership on tackling corruption. Oil, gas and
mining companies from other countries have already disclosed over $150 billion
in payments under similar rules, meaning citizens can begin to hold their
governments to account. If they can do it, you have to ask – what have the U.S.
companies got to hide?” said Gilfillan. The law was finally implemented in 2016
after being passed in 2010 as part of the Dodd Frank reform act. It was
implemented following a broad campaign from civil society groups, investors and
community leaders all over the world.

Prior
to the vote, Bishop Cantu, Chairman of the Committee on International Justice
and Peace at the United States Conference of Catholic Bishops said,
“Transparency in extractive industry payments to governments is important to us
as leaders of the Catholic community of faith and institutions that are
investors and consumers. We believe these principles, policies, and rules can
help protect the lives, dignity and rights of some of the poorest and most
vulnerable people on earth. The rules have moral and human consequences as well
as economic and political impact.”

As a co-founder of
the Publish
What You Pay (PWYP) coalition, Global Witness led the global
movement behind this law. For two decades our investigations have shown the
need for the world’s most corrupt trade to open its books, and our advocacy has
helped make that happen. This work led to the passage of the law we’ve today
seen undone, as well as similar measures in the UK and EU.